Case Summary (Fully Anonymized)

Factual and Procedural Background

The dispute concerns commercial premises comprising the ground floor and basement of a building at [Number] Main Street in The City. The freehold is owned by Company A; the immediate landlord is the head-lessee (Landlord). The under-tenant (Tenant)—a textile dealership and consultancy— has occupied the premises under a 25-year underlease commencing 2 January 1989, using them as a retail art gallery, showroom and archive.

On 16 March 2015 the Tenant served statutory notices requesting a new business tenancy under Part II of the Landlord and Tenant Act 1954 (“the 1954 Act”). On 15 May 2015 the Landlord served a counter-notice opposing renewal under section 30(1)(f) (the “ground (f)”)—i.e. intention to demolish or reconstruct. The Tenant issued proceedings in the Central London County Court on 8 June 2015. A preliminary issue was directed to decide whether ground (f) was made out.

The Landlord produced three successive “schemes of works”. Each was deliberately designed (a) to be sufficiently substantial to qualify under ground (f), (b) to be impossible to carry out while the Tenant remained, and (c) to avoid the need for planning permission that might be refused. The final iteration involved extensive internal alterations—including objectively useless works such as lowering part of the basement slab, relocating smoke vents without purpose, and demolishing then rebuilding an internal wall—at an estimated cost of £776,707 (plus statutory compensation of £324,000). Both sides accepted these works had no commercial or practical utility and would not be pursued if the Tenant left voluntarily.

The County Court (Judge Saggerson) concluded that the Landlord genuinely intended to perform the works and therefore satisfied ground (f); a new tenancy was refused. The High Court (Judge Jay) upheld that decision but granted a leap-frog appeal. The instant judgment reverses those findings.

Legal Issues Presented

1. Whether, under section 30(1)(f) of the 1954 Act, a landlord may legitimately oppose the grant of a new tenancy when the proposed works are designed solely to remove the tenant and would not be undertaken if the tenant vacated voluntarily.
2. Whether the statutory requirement that the landlord “intends” to demolish or reconstruct is satisfied when that intention is conditional on the tenant remaining in occupation.
3. To what extent, if at all, the landlord’s motive or purpose is relevant in assessing the genuineness and quality of the requisite intention.

Arguments of the Parties

Landlord’s Arguments

• Relied on a long line of authority establishing a two-part test (Cunliffe v Goodman and successors): (i) a genuine intention to carry out qualifying works and (ii) a reasonable prospect of doing so. Nothing further—such as motive, utility or reasonableness—was relevant except as evidence of genuineness.
• Provided a written undertaking to the court to perform the works, asserting this demonstrated a firm and settled intention.
• Contended that statutory tenant protection is only a qualified interference with proprietary rights and should not be extended beyond the language of ground (f).

Tenant’s Arguments

• The works lacked any practical utility and were contemplated purely to defeat the Tenant’s statutory right to renewal.
• The Landlord’s intention was conditional—i.e. it would execute the scheme only if necessary to obtain possession—so ground (f) was not engaged.
• The purpose and conditional nature of the Landlord’s intention are legally relevant factors when assessing whether the statutory test is met.

Table of Precedents Cited

Court’s Reasoning and Analysis

The Court held that ground (f) requires a “fixed and settled” intention to carry out the specified works independently of the tenant’s statutory claim. If the landlord would not undertake the works were the tenant to leave voluntarily, the requisite intention is absent. Key points in the analysis were:

• While motive is generally irrelevant, it is admissible as evidence of whether the intention is genuine and unconditional.
• The statutory language assumes the tenant’s occupation is an obstacle to works the landlord already intends to perform; therefore the landlord’s plan must pre-exist and survive the tenant’s departure.
• The Landlord’s own evidence confirmed the works would not proceed if possession were obtained without litigation, demonstrating a conditional intention insufficient for ground (f).
• Earlier authority focused on genuineness but did not authorise contrived or “spurious” schemes whose only value is vacant possession.
• Undertakings to the court, while probative of genuineness, cannot cure a conditional intention that fails the statutory test.

Holding and Implications

HOLDING: APPEAL ALLOWED. The Court declared that, on the facts found, the Landlord does not intend, within the meaning of section 30(1)(f) of the 1954 Act, to carry out the proposed works; accordingly the Landlord cannot oppose the grant of a new tenancy on that ground.

Implications: The decision clarifies that a landlord cannot defeat a business tenant’s right to renewal by formulating works that would be undertaken only to secure possession. The requisite intention must be unconditional and independent of the tenant’s stance. Future litigation may entail closer scrutiny of landlords’ stated intentions and underlying purposes, potentially increasing the evidential burden on landlords who rely on ground (f), but the ruling does not otherwise alter the established need for genuineness.